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ABCs of Decision-Making Biases – Part 1

Here’s a scary thought: when we are sitting down to make the best decision based on the possibilities presented to us, we are often choosing from possibilities that have already been subjected to biases. We may even introduce a different set of biases when it’s time to actually make a final decision. This tendency isn’t due to a lack of intelligence or skill, but rather to the fact that we’re human. The idiom, “to err is human”, is an idiom for a reason!

Whether we are foundation or grant-maker reviewing online submissions and applications, a startup incubator or accelerator reviewing online applications and interview notes to decide on our next cohort of entrepreneurs, or a business building a strategy in a boardroom, these biases promise to get in our way!

For now, we will focus on just four of many common biases that may be present while generating and collecting possibilities to be decided on later. We’ll discuss the biases that present themselves during the decision making stage in Part 2 of this series.

Self-Serving and Group-Serving Bias

This refers to our tendency, both individually and collectively as a team, to attribute success to our talent and genius, and our failures to external forces beyond our control. It’s a great strategy for preserving our self-image or the positive perception we have of the team we work with. It’s a terrible way to make mistakes, learn from them, and improve moving forward.

Imagine we’ve been asked to brainstorm, either alone or with our team, ideas for an upcoming feature change to our product. When these brainstorming sessions produce ideas that have our senior executives jumping with joy, it’s because we’re actually that amazing. When these same executives ask us, literally, what planet we’re from, we may conclude that the instructions were incomplete, the executives are the ones from another planet, or we can sub in our own excuse here. In this scenario, our team is learning from its successes but not its failure, and most of us fail as often as we succeed!

Social Interference

This is a common and detrimental bias. Social Interference is when the type of ideas that we are comfortable putting forward or our willingness to put forward ideas at all is heavily influenced by a team mate(s). This influence could be a by-product of their more senior position, dominating personality, or both. The result can be “group think”, which boils down to everyone thinking the same way and losing the benefits of having a range of ideas and perspectives to draw from.

We all know this person – let’s call him Tom for this example. We get into the meeting room for a brainstorming session we’ve been prepping for. We have some pretty great ideas (self-serving bias aside). In walks Tom, a slightly more senior and much more assertive colleague. He doesn’t care which idea gets chosen as long as it’s his. We decide to move forward and present some of our ideas anyway. We do this knowing that Tom will not like our ideas because they are not his, nor are they in line with his thinking. As expected, our ideas are met with harsh criticism in front of our colleagues. As the session progresses, we contribute less and less, and present ideas that won’t be met with criticism from Tom, despite not believing in these ideas ourselves. The result is a brainstorming session that may produce fewer ideas and/or ideas that are very similar to one another.

Anchoring

Anchoring refers to those brainstorming sessions where we get stuck on a single idea. We dive deeply into a few ideas at the expense of generating more and possibly better ideas across a broad spectrum.

Anchoring can occur in teams that include detail oriented individuals. The idea people love to throw an idea out there only to move on and throw a completely different idea out onto the whiteboard. This is what brainstorming is supposed to be about after all. But the detail-oriented people among us (I might be in this boat) have a tendency to latch onto, or anchor onto an idea deemed promising. This moves the brainstorming session away from idea generation and towards refining a proposed idea and fleshing it out in detail. There is a time and place for this idea validation, but this brainstorming session probably isn’t it!

Belief Perseverance

Some might call this being a visionary; others would call it Belief Perseverance. This refers to our tendency, despite data and teammates that point to the contrary, to hold on to our initial beliefs. This can lead to decisions made on a “hunch” rather than decisions backed by the information available.

Imagine we’re on a team of investors, deciding where to invest the group’s funds next. We’ve had a lot of success in the past investing in the textile industry and as a result, we believe that we should continue in this direction. Our fellow partners respectfully disagree, throwing pie charts and Forrester reports at us saying that this market is struggling but that hardware and software innovation in healthcare is booming. Despite the strong evidence against our beliefs in the textile market, and the lack of evidence in support of it, we continue to be “bullish” on textiles. If we’re right, we’re a visionary. We are usually wrong to ignore high quality information though, and so we’re likely suffering the effects of Belief Perseverance.

Decision making time

We’re not even at the point of making a final decision, yet Self-Serving/Group-Serving bias, Social Interference, Anchoring, and Belief Perseverance threaten to lower the quality of the choices available.

How can we be confident in our final decision when it’s possible that we are not given the best choices available due to the rampant presence of biases? Luckily there are a number of ways to reduce our susceptibility to these and other biases including: becoming more aware of these biases (which we’re doing now), and implementing online submission and application management tools and software.